The state of the market
Industry experts, analysts and investors alike are beginning to share sentiments that the Bitcoin price is gearing up for a major bull run this year.
On January the 7th 2018, the cryptocurrency market cap hit its peak of $817 billion USD. Since this date, the market has pulled back significantly, with the overall markcap reducing by $545 billion, or around 66%.
Figure – Coinmarketcap.com
Other metrics showing decreases are trading volumes, which have reduced from the December highs of $46 billion, all the way down to $13 billion at the time of writing.
The reduction in market capital and trading volumes although severe, are still up significantly since this time last year. On 20th June 2017, the market capital was $115 billion, and trading volumes were $5.1 billion. An increase in market cap of approximately 2.5x for both metrics respectively.
Figure – Coinmarketcap.com
Recovery is in sight
Various experts, indicators, and industry professionals are beginning to signal that recovery is iminnent. Brian Armstrong, CEO of exchange Coinbase, recently shared a tweet that shows similiar bull runs and susbequent pullbacks, and how he shared with his team that these events have happened often in cryptos turbulent past.
— Brian Armstrong (@brian_armstrong) June 19, 2018
Indicators like Trace Mayers ‘Mayer Multiple’, which is calculated by dividing Bitcoins 200 day moving average by its current price, is currently at 0.67. This number is only ever this low 6.75% of the time, with the average Mayer Multiple for the life of Bitcoin being 1.55.
Jun 21, 2018: The current Mayer Multiple is 0.67 with a $BTC price of $USD 6,768.82 and a 200 day moving average of $10,152.17 USD. The @TIPMayerMultple has historically been higher 93.25% of the time with an average of 1.55. Learn more at: https://t.co/9n0xlTWuNP
— Mayer Multiple (@TIPMayerMultple) June 21, 2018
Bitcoin Price Predictions
Australias own Rabbi Ahmed, who is head of trading at Bit Trade Labs, has given some unique insights into the state of the market, which is based around Bitcoin being the key health indiciator.
2018 has begun with a bear market, however we believe that from our current price of around $6000 until $4700 is a good range to accumulate Bitcoin. The highs from the tail of last year coincided with the launch of the CME futures exchange. Which allowed clients to not just hedge their crypto currency holdings but also to make money on downside movements through shorting the futures contract.
Using market analysis, Rabbi points out that the market is highly correlated to the ‘Wall street phsycology of a market cycle’, and that we are now heading into the depression phase of the cycle.
Incredibly, the correlation between between the market psycology cycle and the cryptocurrency market cap is near identical.
In regards to the current price and future predictions, Rabbi says;
We have strong support between $5400-$4700 and believe that if the market gets to these lower prices and we have strong bids (buyers) with decent volume, this could be the low of the year. We anticipate that the low of the year should reach by the end of August.
In regards to higher price targets, we believe that there would be a rally initiated by the end of the year and no later than May next year. In terms of price targets, we believe we will see prices regain above $12,000 USD by the end of the year and break past $25,000 by June 2019.
These prices reflect many sentiments in the industry, with other experts like Fundstrats Tom Lee, who is firm on seeing a Bitcoin price of $25,000 USD by the end of the year.
Other well known industry participants like David Drake, who is the chairman of family office LDJ capital, believes we will see Bitcoin at $30,000 USD by the end of the year.
Rabbi’s rationale for Bitcoins future price movement is based around the market maturing, in addition to much needed regulation to lower risk for instituions to start investing.
Rabbi finishes with;
Over the coming months, processes are being implemented to allow institutional demand to enter via custodial and coin handling infrastructure. Hence, the next rally will not be from retail investor driven, but new money through institutional demand.
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Beau is the Founder & Chief Editor at Cryptocurrency Australia Media, an educational platform designed to help anyone learn about cryptocurrency investment and blockchain technology. Beau is also the Founder & Principal Consultant of Blockchain Management Solutions, a specialist technical and project management consultancy, is an advisor with Masternode Ventures, a blockchain incubator, and is an advisor with THORChain, a new decentralized exchange protocol.